Ethanol Industry Scrambles to Keep Incentives

The once-popular ethanol industry is scrambling to hold onto billions of dollars in government subsidies, fighting an increasing public skepticism of the corn-based fuel and wariness from lawmakers who may divert the money to other priorities. The industry itself can't agree on how to persuade Congress to keep the subsidies, which now come in the form of tax credits worth about $6 billion annually. One industry group, Growth Energy, made the bold move Thursday of calling for the tax credits to be phased out completely in favor of spending the money on more flex-fuel cars and gasoline pumps that support ethanol. A rival group, the Renewable Fuels Association, said it's too late in the year to make such proposals -- the tax credits expire at the end of the year, and legislative days are numbered. As the industry bickers over what to do, Congress is signaling it's growing tired of paying for ethanol. The House Ways and Means Committee is considering slashing the tax credit by 9 cents a gallon, from 45 cents to 36 cents, when it looks at a wide range of energy tax credits as early as next week. That would be the second cut in the credit in as many years. A key senator also expressed skepticism this week. Sen. Jeff Bingaman of New Mexico, Democratic chairman of the Senate Energy and Natural Resources Committee and a longtime supporter of renewable fuels, said Congress should "weigh all factors, including the credit's very high cost to taxpayers," when looking to extend the credit. Bingaman noted that the ethanol industry is protected by congressional mandates for its use...more

Go Jeff, you are right on this one.